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Ahead of Thursday's annual results, new Nestle CEO Laurent Freixe faces mounting pressure as the food giant's slumping share price rattles shareholders and pension funds. Freixe took the helm of the Swiss-based company, known for brands like Nespresso, Purina, and Maggi, in a surprise leadership change last September.
A company veteran who headed the Latin America division before his promotion, Freixe was given the task of reviving Nestle sales, which have yet to fully recover from a wave of inflation that prompted consumers to slash spending.
Sales totalled 93 billion Swiss francs ($102 billions at current rates) in 2023, falling 1.5 percent from the previous year. The group has also faced scandals in Switzerland and France over the use of banned filtering systems for its mineral waters, and the deaths of two children who had consumed Buitoni pizzas suspected of being contaminated with E.coli.
In November, Freixe unveiled a plan combining new cost-cutting measures, increased advertising spending with a focus on the brand's top-selling products, and a reshuffle of its water business. Despite these measures, the share price continued to fall, shedding nearly a quarter of its value in 2024. As a result, Nestle lost its leading position on the Swiss stock exchange, dropping to third place behind pharmaceutical giants Roche and Novartis. At the start of February, shares were trading at around 77 and 78 Swiss francs, a significant drop from its peak of nearly 130 francs at the end of 2021.
In Switzerland, the NZZ daily newspaper warned that many Swiss citizens were affected given Nestle's weight in pension fund investment.
For daily newspaper Tages-Anzeiger, the stock can no longer be considered a "Grossmutter-Aktie" (German for grandmother stock), referring to stable, long-term investment stock suitable for risk-averse investors. The newspaper also reported that shareholders could end up calling Nestle's board to account.
